Starting a Company and Failing

I was 18 the first time I got threatened with a lawsuit. Legally, my hands were tied and the only cause I had to blame (other than myself) was an earthquake in Pakistan and some bad luck. My biggest fear wasn’t going bankrupt (I had no assets at the time), instead it was not graduating from high school.

The headlines are full of stories of technology companies that are succeeding in big ways. This year has already seen huge valuations of hot companies and a river of IPOs seems to be on the way. In the midst of this excitement, it is easy to lose track of the many companies that fail. This is my contribution to the latter.

My senior year in high school I started my first company. I didn’t know how to code, didn’t have design skills and had zero experience running a business. Despite those minor details, I decided there was no better way to learn than to jump in. That year I started It quickly became the most popular social network at Eastlake High School during 2005. (Ha) I outsourced the entire project to a firm based in Pakistan. Not knowing better, I chose them based on price rather than on reputation. I figured, “I am a startup and they are a startup, this will work out great.” I registered a sole proprietorship (a mistake I would later regret) with the state of Washington and opened a business banking account.

Despite my inexperience, the website started to gain traction. It quickly outgrew just my high school and started to gain momentum in the greater Seattle area. But wait, haven’t we seen this movie? At the time, Facebook was just gaining traction. I noticed this and e-mailed the then unknown Mark Zuckerberg. He never responded and I didn’t think about that e-mail until years later. How might that have changed my life?

As my numbers moved up and to the right (for reference I was using awstats as GA wasn’t available yet), I decided it was time to disable the contact form on the homepage. I didn’t know PHP but had FTP access to the site and decided it was time to get my hands dirty. I am still not sure how I accomplished this, but my edits to the contact form took down the entire site. Panicked, I e-mailed my agent in Pakistan to get my error resolved. It was night time there and the site remained down until the companies employees awoke in the morning. The fact that it took so long to resolve my mistake and that I didn’t have a phone number to call should have been a red flag. At the time, I didn’t see it.

A few weeks later the site went down again. This time I hadn’t touched anything. I sent an e-mail to the same source but this time didn’t get a response in the morning. The next morning, still no response. The site was down for 3 days before I got a response.

Apparently, there had been a massive earthquake in Islamabad, Pakistan and it took down the local powergrid. At the time, Amazon Web Services and Rackspace hadn’t been invented yet so cheap server space was still hard to come by. Whatever server space they could get, was my only option.

Eventually the company moved all of their files over to an offsite data center and Eastsidelink went back up. Everything appeared to be back to normal. I was smiling again and traffic started to regain its levels before the outage.

All of this changed a week later. I received an invoice for a little over $10,000 dollars. Panicked, I e-mailed my contact in Pakistan to figure out what was happening. Apparently my site had been hacked and caused physical damage to the rented servers. This apparently caused irreversible damage. (Obviously, this was highly unlikely but I didn’t know enough at the time to know better) As a result, they sent me an invoice. I politely refused their request. They took my website offline, deleted all of my files and had their lawyer contact me. Bewildered, I had no idea what to do. The situation had gotten way out of control and I had no way of restoring the site. I had no backups and hadn’t even heard of colo facilities or version control. All of my code and data was completely wiped out.

To this day the only version of the site that I have is a useless snapshot from the wayback machine.

Back at my high school, my senior project advisors asked to see my work. I showed them the screenshots and the analytics data. They asked to see the live site and I explained the situation. It was gone without backup. They were skeptical and upset. The next day I brought them bank records, receipts, business cards with logos and had some of the students who had used the site talk to them. They believed I had done the work but required me to have tangible work in order to fulfill the graduation requirement.

Again, I was bewildered. My other friends had recorded themselves cooking various meals and fulfilled the requirement. I had started and lost an international company and the advisors didn’t think it was enough. I ended up writing an essay on what I had learned from the failure and they passed me. It was one of the last major hoops I jumped through for academia.

A while after officially closing my first company, I joined another technology startup. That startup ( did much better and I learned an incredible amount about the best practices for running a company. My experience there was priceless and it eventually led me to start my second company, Intriguing Ideas LLC. That company is profitable (just by the technical definition ;-p) and I am excited about the year to come.

People love to read the story about the business that was an overnight success. The part that most people skim over is the years of failure that came first. For me, the journey (even if it riddled with failures) is the more interesting part of the story.

Comments on this entry are closed.

  • Timo Smeets

    Wow, quite a story!

    What happened with the Pakistan lawyer?

    • Danny Dover

      He eventually stopped e-mailing :-)

  • scott

    What about Totally an overnight success

  • Bogdan

    Love reading your stuff. Always knew you’ld turn out alright.

    • Danny Dover

      I appreciate it buddy!

  • Hi Danny,
    I got hit with a 7k over-bandwidth godaddy bill a few months back and it was a nightmare. It turned out to be some server problem but they held me fully responsible. I host elsewhere now and am keeping a close eye on bandwidth usage.

    • Danny Dover

      Yikes! That is intense. Sorry to hear they didn’t help, I am not a fan of GoDaddy, their customer service has always plagued me. If you can do shared hosting, you might want to check out the unlimited bandwidth options at Siteground and Hostgator. They are cheap and so far have been very reliable.

  • I can’t believe the teachers wouldn’t pass you! That I think is a sue-able offense. :)

  • Willo!

    “People love to read the story about the business that was an overnight success. The part that most people skim over is the years of failure that came first. For me, the journey (even if it riddled with failures) is the more interesting part of the story.”

    Very powerful and encouraging words Danny!

    Thanks for this post =-D I am reading your book and so far really amazing stuff, I enjoy the humor aspect you add to it as well. (whatisjessicasimpsonthinking .com) LOL

    • Danny Dover

      I appreciate it Willo :-) Hope all is well!

  • This story is really funny, but also it’s sad to think you had to walk away from a successful enterprise because of some bad luck. I know some people might step in and jovially pronounce that this teaches you some valuable life lesson about loss and the transitory nature of our possessions yada yada yada, but it still kinda sucks.

    Easy come, easy go is the most I’d dare to say.

  • Wow ! What a wonderful read :)

    Its all about time and your hard effort ! Thumbs up mate ! I am so encouraged :)

  • Robert Brown

    Amazing story!

    It’s great that you didn’t give up after your first business failed. You do hear so many stories about super business success sometimes, it’s easy to forget about how hard it it is sometimes to avoid the problems that can derail any business!

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